British efficiency expert Sir Peter Gershon has suggested
agency budget cuts totalling $540 million, castigating the
federal public sector for poor governance mechanisms on technology
projects and an ICT spending model which gave individual
departments and agencies too much autonomy.
In a landmark report closely examining the Federal Government's
use of technology, delivered late yesterday, Gershon wrote the
current model came close to treating many agencies "as though they
were independent private sector entities".
The efficiency specialist, who was appointed by finance and
deregulation minister Lindsay Tanner to review the sector in April
this year, said this led to "sub-optimal outcomes in the context
of prevailing external trends, financial returns, and the
objectives of the current government".
Sir Peter Gershon and Lindsay Tanner.
(Credit: Brian Hartigan)
Despite the existence of the Australian Government Information
Management Office led by federal CIO Ann Steward, which aims to
coordinate agencies' use of IT, Gershon concluded there was weak
governance of pan-government issues relating to IT.
Agencies, he wrote, not only had weak governance mechanisms in
terms of their ability to manage ICT-enabled projects, but also did
not subject their business-as-usual IT support funding to
One urgent issue was the lack of a whole-of-government
strategic plan for the use of datacentres; Gershon wrote that the
absence of such a plan meant the government as a whole would be
forced into a series of ad-hoc investments over the next 15 years
that could cost taxpayers more than $1 billion more than it
Other issues included the fact that the government marketplace
for buying goods and services was "neither efficient nor
effective", and that there was a "significant disconnect between
the government's overall sustainability agenda and its ability to
understand and manage energy costs and the carbon footprint of its
In the report, Gershon recommended what he described as "a
major program of both administrative reform and cultural change"
to fix the problems.
For starters, the expert said agencies covered by the Financial Management and Accountability Act 1997
should reduce their use of contractors by 50 per cent over a
two-year period and increase in-house staff numbers, saving $100
million; create a ICT career structure; develop a whole of
government ICT workforce plan, and develop a 10-15-year datacentre
Such agencies that had business-as-usual ICT budgets north of
$20 million should also have those budgets cut by 15 per cent over
two years, along with a shift to spend more money on projects.
Those with budgets between $2 million and $20 million could have their
budgets sliced by 7.5 per cent over the same period. This could
save a total of $540 million, with the money to be transferred to a
central fund for reinvestment in projects to improve
At the strategic level, Gershon recommended a ministerial
committee on ICT be established to support whole of government
initiatives, as well as a secretaries' ICT governance board, and a
common methodology created to assess agency capability to manage
ICT-enabled projects. A sustainability plan would also be
All of this, according to Gershon, would not come easy. "Based
on my experience of creating sustainable change in the UK public
sector there are two critical requirements which will determine the
success of proposed program," he wrote, citing drive from
ministers and top public servants, as well as the availability of
proper funding and skills resources as the critical factors.
Tanner said in a statement that without pre-empting the
report's impact in Cabinet, it formed "an excellent basis" for
implementing a series of changes for improving the effectiveness
and efficiency of government technology use.
The full report can be downloaded here.